Hong Kong-listed Success Dragon International Holdings has announced it has entered into an agreement to acquire a stake in a 5-star hotel located in Danang, Vietnam.
The total consideration is U$14.1 million, which will allow the company to hold a 45 percent equity interest in the hotel and the land.
The hotel was identified as One Opera Danang Hotel, the deal will also include the electronic gaming machine club operated within the hotel.
According to its filing to the Hong Kong Stock Exchange, the purchase is subject to a number of conditions which at the time of the filing had not yet been fulfilled, including satisfaction with the results of the due diligence review, to have an assessment of hotel assets by an independent valuer, approval of the shareholders of the SP agreement and more.
Completion will take place seven business days after the fulfilment of all outstanding conditions.
Earlier in the year, Success Dragon chairman and CEO Carlos Luis Salas Porras said he had high hopes for the Vietnam market.
According to Salas, the competition in Macau’s gaming market is getting more intense with fewer Chinese visitors to the city, no doubt as a result of Beijing’s crackdown on corruption and new policies. In comparison, gaming competition in Vietnam is not high, and the number of slot machines currently is low. He added that margins generated by the slot management business in Vietnam could be 100 percent higher than those generated in Macau.
Last December, Success Dragon announced it had entered into two agreements to provide outsourced services of electronic gaming machine management in Le Meridien Hotel in Ho Chi Minh City, and One Opera Hotel, in Danang, Vietnam.